As reported by the European Council, the representatives of the Member States agreed on 23 June 2025 on the Council's negotiating mandate for the simplification of sustainability reporting requirements and due diligence obligations to strengthen EU competitiveness, according to which the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) are to be simplified. This is to be achieved by reducing the reporting burden and limiting the transfer of obligations (trickle-down effect) to smaller companies. The proposal is part of the "Omnibus I" package adopted by the Commission on 26 February 2025 (trade-e-bility reported: CSRD & CSDDD postponement coming). Here are the key aspects:
CSRD: With regard to the CSRD, the Commission has proposed raising the threshold of 1,000 employees and excluding listed SMEs from the scope of the directive. As part of its mandate, the Council has added a net turnover threshold of over €450 million to further reduce the reporting burden for companies. The Council's mandate also introduces a review clause concerning a possible extension of the scope to ensure adequate availability of companies' sustainability information.
CSDDD: While the scope of the CSDDD was not addressed in the Commission's proposal, the Council has increased the thresholds for employees to 5,000 and for net turnover to €1.5bn. In the Council's view, the largest companies can exert the greatest influence on their value chain and are best placed to absorb the costs and burdens of due diligence procedures. The Council's mandate shifts the focus from a company-based approach to a risk-based approach, focussing on the areas where actual and potential negative impacts are most likely to occur. Companies should no longer be required to undertake a comprehensive mapping exercise, but should instead undertake a more general investigation. In order to adequately safeguard the policy objectives, the mandate ensures that investigation and assessment obligations are extended where objective and verifiable information indicates the existence of negative impacts that go beyond direct business partners. In addition, the Council's mandate introduces a review clause concerning a possible extension of these obligations beyond "Level 1". Further details can be found on the EU Council website.
Next steps: The Presidency can now start negotiations with the European Parliament to reach an agreement on this dossier once the Parliament has finalised its own negotiating position.
Questions about CSRD and CSDDD? The trade-e-bility consulting team will be happy to help you via +49/40/750687-300 or send us an e-mail.
